Referral program overview

Understand the core concepts and workflow of building referral programs in Voucherify

Referral programs turn your existing customers into brand advocates. By rewarding users for inviting their friends, you create a self-sustaining growth loop that lowers acquisition costs and increases customer lifetime value.

Learn how referral mechanics work, from rewarding the referrer and the referee to managing multi-level programs.

Key referral concepts

The following concepts are key for understanding the referral program.

Referrer (advocate)

The existing customer who shares their unique referral code with others. They receive a reward once their friend redeems the code or performs the custom event.

Referee (friend)

The new customer who joins using a referral code or performs the custom event. They often receive a “welcome” incentive to encourage their first interaction with your brand.

Referral code

A unique code assigned to a referrer. When a referee redeems (uses) this code, Voucherify links the two profiles to track the successful conversion event.

Conversion event

A conversion event is the specific action that triggers a successful referral in Voucherify. Each campaign can only have one primary conversion event: code redemption or custom event.

Referral tier

A reward level that defines when and how a referrer is rewarded. Tiers enable milestone-based and multi-level referral programs.

There are two criteria for rewarding the referrer:

• Each unique referee redemption
• Minimum unique referee redemptions

By setting referral tiers, referrers can receive better rewards when they refer, for example, more than 20 people, and even more rewards when they refer more than 50.

Reward

An incentive issued to referrers and, in double-sided programs, to referees. Rewards can include discounts, gift credits, or loyalty points.

Referral code publication

The assignment of a referral code to a specific customer. Codes must be published before a customer can start referring others.

Optionally, codes can also be shared by non-referrers, allowing multiple people to distribute the same code.

Join-once campaign

A setting for referral programs that ensures a customer can hold only one referral code per campaign. Once set, this can’t be toggled off in the Dashboard.

Auto-update campaign

An optional mode where the application automatically generates new unique referral codes when the initial batch runs out.

Referral program types

When setting up your incentive workflow in the Campaign Manager, you must decide between a single-sided or double-sided structure. This determines who is rewarded when a conversion event occurs.

Single-sided programs

In a single-sided program, only the referrer (the person sharing the code) is rewarded. The referee (the invited friend) joins the program or performs an action but does not receive an incentive from the referral campaign itself.

Double-sided programs

A double-sided program rewards both the referrer and the referee. This “mutual benefit” model is often more effective at driving high conversion rates because it incentivizes the invited customer to complete their first purchase or sign-up.

Conversion events

A conversion event triggers a successful referral either by redeeming a referral code or by triggering a custom event in your system.

Referral code redemption

The most common conversion event is a successful redemption.

• The referee uses the referral code during a checkout process.
• Voucherify marks the customer as “referred” the moment the redemption is successful.
• If a discount is assigned to the referee, it is applied directly to their order during this step.
• Referrer (and referee in case of a double-sided program) receive a reward.

A referrer can’t redeem the code they own. Only referees can.

Custom events

Prerequisite: Developer setup

Tracking custom events in your system requires sending them to Voucherify through POST Track custom events API endpoint.

When Voucherify tracks your custom events, the conversion event flow looks as follows:

• Voucherify counts a successful referral only after receiving the API call for that specific event.
• Even if a referee redeems a code for a discount earlier (for discount coupon rewards), the referrer is not rewarded until the custom event occurs.
• To pass the events, send a request to the track custom event endpoint. Include the referee’s details and the referral code in the payload.

Referee rewards

In double-sided programs, the new customer also receives a reward when the conversion event occurs.

Reward types

You can choose from several reward categories depending on your business model:

• Discount coupon: Applies an immediate discount (e.g., 20% off, free shipping, or a fixed amount) to the referee’s order when the referral code is used for redemption.
• Gift card credits: Adds a specific balance to the referee’s gift card.
• Loyalty points: Adds points to the referee’s loyalty card, which can be redeemed for future rewards.

If a referee doesn’t already have a loyalty or gift card, Voucherify will automatically publish one to their profile before adding the points or credits.

Validation rules for referees

To prevent fraud and ensure high-quality leads, you can add a validation rule to referee rewards.

The recommended default rule is Redemptions per customer in a campaign set to 1. This ensures that each new customer can only be “referred” once, maintaining the integrity of your campaign budget.

Referral workflow

Voucherify supports the referral program lifecycle through the following stages:

1. Configuration

   Build your referral logic in the Dashboard. This includes selecting conversion event, reward tiers and criteria, and defining specific rewards.

2. Enrollment and sharing

   Assign referral codes to your advocates through publication. You can use distributions to send these codes with email, text messages, or display them directly in your application.

3. Conversion

   When a friend performs the conversion event (code redemption or custom event), they provide the referrer’s referral code. Voucherify checks the code and records the link between the referrer and the referee.

   For double-sided programs, the referee receives their reward at this step.

4. Reward triggering

   Once the defined criteria (each unique referee redemption or minimum unique referee redemptions) in a referral tier are met, Voucherify automatically triggers the reward for the referrer.

5. Analysis

   Track the performance of your referral campaigns using real-time reports to understand what drives customer engagement.